Low inflation and slow housing bring calls for rate cuts
THE impact of last year's interest rate cuts was only modest and more cuts to the Reserve Bank's cash rate are justified, according to the Real Estate Institute of Australia.
After the Australian Bureau of Statistics released the latest housing finance figures, REIA president Peter Bushby said the finance figures (excluding refinancing) showed falls in New South Wales, South Australia, Tasmania and the Northern Territory, and only small rises in Queensland and Victoria.
"The number of first home buyers, as a percentage of total owner occupied housing commitments, decreased to 14.9% in December 2012," Mr Bushby said.
"This is the lowest since 2004 and compares to the long-run average proportion of 20.2%."This is of particular concern as some states have reduced their assistance to first home buyers who wish to purchase established dwellings."
The value of investment housing commitments rose by 1.3%, in trend terms, in December, which followed similar increases in late 2012.
"These housing finance data figures indicate that a further reduction in interest rates is justified," Mr Bushby said.
"With inflation within the RBA's target zone, I hope the Reserve Bank board members act in the interest of home owners when they meet in March."